Correlation Between Eic Value and Transamerica Growth
Can any of the company-specific risk be diversified away by investing in both Eic Value and Transamerica Growth at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Eic Value and Transamerica Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eic Value Fund and Transamerica Growth T, you can compare the effects of market volatilities on Eic Value and Transamerica Growth and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Eic Value with a short position of Transamerica Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eic Value and Transamerica Growth.
Diversification Opportunities for Eic Value and Transamerica Growth
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eic and Transamerica is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Eic Value Fund and Transamerica Growth T in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Growth and Eic Value is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Eic Value Fund are associated (or correlated) with Transamerica Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Growth has no effect on the direction of Eic Value i.e., Eic Value and Transamerica Growth go up and down completely randomly.
Pair Corralation between Eic Value and Transamerica Growth
Assuming the 90 days horizon Eic Value Fund is expected to generate 0.56 times more return on investment than Transamerica Growth. However, Eic Value Fund is 1.8 times less risky than Transamerica Growth. It trades about 0.25 of its potential returns per unit of risk. Transamerica Growth T is currently generating about 0.08 per unit of risk. If you would invest 1,857 in Eic Value Fund on August 31, 2024 and sell it today you would earn a total of 65.00 from holding Eic Value Fund or generate 3.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eic Value Fund vs. Transamerica Growth T
Performance |
| Timeline |
| Eic Value Fund |
| Transamerica Growth |
Eic Value and Transamerica Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eic Value and Transamerica Growth
The main advantage of trading using opposite Eic Value and Transamerica Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eic Value position performs unexpectedly, Transamerica Growth can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Transamerica Growth will offset losses from the drop in Transamerica Growth's long position.| Eic Value vs. Rbc Funds Trust | Eic Value vs. Nasdaq 100 Index Fund | Eic Value vs. Victory Incore Fund | Eic Value vs. Shelton Funds |
| Transamerica Growth vs. Pender Real Estate | Transamerica Growth vs. Goldman Sachs Real | Transamerica Growth vs. Tiaa Cref Real Estate | Transamerica Growth vs. Franklin Real Estate |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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